TIGA, the trade association representing the UK video games industry, has urged the Government to enhance the Video Games Expenditure Credit (VGEC), including by raising the rate of relief for smaller budget games, expanding the range of qualifying costs, confirming that post-release launch development costs can qualify and setting a target of 40 days for HMRC to process claims. TIGA made the comments following the Budget delivered by The Rt Hon John Healey, the Chancellor of the Exchequer on 28th October 2026.
Key announcements affecting business made by the Chancellor of the Exchequer in the October Budget and the Office for Budgetary Responsibilty’s (OBR) forecasts include the following:
Video Games & Creative Industries
- Corporate Interest Restriction (CIR): Interaction with creative reliefs – the Government will introduce legislation in the Finance Bill 2026-27 to make technical amendments to Corporate Interest Restriction (CIR). From 1 January 2027, the calculation of taxable earnings for CIR will exclude Audio-Visual Expenditure Credits and Video Games Expenditure Credits.
- UKRI is investing in world-leading science and innovation clusters across the UK, including over £75 million into the CoSTAR network of state-of-the-art labs located in Yorkshire, Dundee, Belfast, Buckinghamshire and Surrey.
Taxation
- An increase in the bank surcharge to 6 per cent for 15 months from January 2027.
- Threshold at which shops start to pay business rates in England to rise from £12,000 to £18,000.
- Increase in gambling taxes – the changes apply to gambling machines, etc, rather than video games.
- Introduction of a new Founders Relief: a new 10% Capital Gains Tax rate on lifetime gains of up to £10 million from April 2027 for eligible founders and early investors in innovative, high-growth companies.
- Introduction of a Scale-up fund for female founders.
- Increasing the trading allowance from £1,000 to £3,000.
Investment
- £20.4 billion of additional support for the the state’s business lenders and infrastructure bank to support renewable energy, defence, AI and other projects.
- £140 million investment for strategic British AI firms.
- A £165m National AI Biosecurity Initiative will include £100 million for a world-first AI Biosecurity Lab, alongside £200 million of further funding from industry.
- Simpler R&D tax relief claims: Claim Notification Form scrapped from April, Additional Information Form simplified.
- £25m for UKRI Venture Doctorates, £16m of proof-of-concept funding for research to commercialisation
Devolution of tax revenues:
- 100 per cent of business rates to be devolved by the end of the decade.
- 20 per cent of business rate revenues will go to mayors in 2027.
- In 2028 a share of income tax revenues will go to mayors.
Wages and benefits:
- National Minimum Wage to rise by 3.9 per cent.
- Parental pay extended to self-employed fathers and same sex couples.
Other annoucements:
- Public procurement will be used to offer more support for British business.
- Re-establishment of Better Regulation Executive to reduce regulatory burdens.
TIGA has advanced the following proposals to grow the UK video games industry:
- A Games Growth Relief could be introduced, with production budgets of less than £15 million eligible to claim a credit of 53 per cent on qualifying expenditure. The 53 per cent rate could be gradually tapered down to the standard rate on games with budgets of up to £23.5 million. A rate of 53 per cent on 80 per cent of qualifying costs, on games with budgets of up to £23.5 million could increase the sector’s GVA by £482 million and create 6,952 jobs (including 896 development roles). If the 53 per cent rate of relief was limited to games with budgets of up to £15 million, this would increase the sector’s GVA by £434 million and create 6,264 jobs, including 807 development roles.
- The standard rate of VGEC relief could be increased from 34 per cent to 39 per cent. This could boost GVA by £436.2 million and create 6,291 jobs (including 760 development roles).
- The proportion of qualifying expenditure under VGEC could be increased from 80 to 100 per cent. This could increase GVA by £731.7 million and generate 10,551 jobs (including 1,292 developers).
- VGEC’s qualifying costs could be expanded to include tangible assets (machines, servers), debugging and community management, and the VGEC 10 per cent expenditure threshold could be lowered to attract more international game development work.
- A studio that has acquired a game and which has incurred new development expenditure could be eligible to claim VGEC on these new costs.
- The Government could explicitly confirm that post-launch development costs, such as DLC, can quality for VGEC. Being able to claim VGEC on post-release content is extremely important, especially for small, independent studios that are trying to sustain and grow a game after launch.
- HMRC should adopt a KPI to process VGEC claims within 40 working days. This would help studios to plan and minimise the risk of a negative impact on developers’ cashflow.
- The Government could explore the potential for establishing a Scale-Up Fund. The Fund, which has been suggested by the UK Video Games Council, could provide project based, late seed & Series A growth capital (£500k to £2m per studio) to studios that have some market validation (e.g. a commercially released title). The Scale-Up Fund could be delivered as a co-investment Fund, with two thirds of investment coming from the British Business Bank’s (BBB’s) Enterprise Capital Funds and one third from private investors. The BBB would invest directly into the Scale-Up Fund.
Dr Richard Wilson OBE, CEO of TIGA, said:
“The UK video games industry is the largest in Europe, has a highly skilled workforce, and previous TIGA research with the University of Portsmouth shows that the sector generates £12 billion in GVA and contributes £2.2 billion in tax revenues.
“The same research shows that enhancements to VGEC could propel growth in the games industry and support growth in the wider ecomomy. For example, the introduction of a Games Growth Relief with a rate of 53 per cent on 80 per cent of qualifying costs for projects up to £15 million could create over 6,200 skilled jobs and increase GVA by £482 million. TIGA looks forward to working with industry partners and engaging with Government to drive the UK games industry forward.
“Additional reforms to VGEC, including an expansion of qualifying costs, confirmation that post-launch development costs qualify for VGEC, and ensuring that the vast majority of VGEC claims are processed within 40 days will give an important boost to the game development sector, including SME studios.”
ENDS
Notes to editors
More information about the economic impact assessment relating to VGEC can be found in the report, Economic Impact Assessment of the UK Video Games Industry (TIGA, 2025). The report was commissioned by TIGA and authored by Professor Homagni Choudhury, Professor Joe Cox and Dr Alan Leonard of the University of Portsmouth.
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About TIGA
TIGA is the trade association for the UK video games industry. TIGA’s vision is to make the UK the best place in the world to develop video games. To this end, TIGA:
- engages with policymakers to create an environment favourable to video games development;
- enhances education and skills through our accreditation programme, the TIGA Games Education Awards and our education conferences;
- promotes best practice and celebrates excellence, including through the TIGA Games Industry Awards; and
- supports studios to start-up, scale-up and grow through the provision of information and conferences dedicated to studio growth.
Get in touch:
Email: info@tiga.org
Web: www.tiga.org
Twitter: www.twitter.com/tigamovement
Facebook: www.facebook.com/TIGAMovement
LinkedIn: http://www.linkedin.com/company/tiga